The farm ministry and the health ministry are negotiating the establishment of a food safety agency in fiscal 2002, ministry officials said.

The proposed agency would be formed by combining the ministry divisions that currently oversee policies related to food safety and hygiene in the livestock industry, the officials said Monday.

The move comes in the wake of scathing public criticism over the agriculture ministry's failure to prevent mad cow disease from spreading to Japan.

The Agriculture, Forestry and Fisheries Ministry has been blamed for failing to curb production and import of meat-and-bone meal, a cattle supplement made from cow parts that has been linked to the brain-wasting illness.

The proposed agency would seek to ensure food safety by overseeing the production, distribution and sales processes, they said.

The agriculture ministry and the Health, Labor and Welfare Ministry may submit a bill to the ongoing regular Diet session with an eye to founding the agency in the fiscal year that begins April 1.

Most of the members of a panel established by the two ministries to examine the government's conduct leading up to the detection of mad cow disease in Japan in September reportedly back the creation of a food safety agency.

Earlier this month, vice agriculture minister Hideaki Kumazawa stepped down in the turbulent aftermath of the mad cow disease outbreak.

Kumazawa has been accused of neglecting warnings in the mid-1990s that Japan was at risk of an outbreak of the disease, formally known as bovine spongiform encephalopathy.

In 1996, when warnings over the suspected link between meat-and-bone meal and BSE were mounting, Kumazawa, then director of the livestock industry bureau, stopped short of banning sales of the meal.

Earlier that same year, the World Health Organization had called for a total ban on meat-and-bone meal, while in June 1996, the European Union warned the disease could hit Japan.

In April 1996, Kumazawa asked farmers to "refrain" from feeding meat-and-bone meal to cows, but did not outlaw its use despite repeated calls from experts for the practice to be banned.

Three cases of mad cow disease have been confirmed in Japan since the first was detected in September.